74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1788
House Bill 3507
Sponsored by Representative WITT; Representative BUTLER
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Creates tax credit for investments in personnel and equipment
that lead to job creation. Increases credit for investments made
in distressed area.
Applies to tax years beginning on or after January 1, 2008.
A BILL FOR AN ACT
Relating to investment tax credits.
Whereas the Legislative Assembly finds that there is a need to
promote investments in personnel and equipment that lead to job
creation; and
Whereas the Legislative Assembly finds that this need is
greater in economically distressed areas; now, therefore,
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Section 2 of this 2007 Act is added to and made
a part of ORS chapter 315. + }
SECTION 2. { + (1) As used in this section:
(a) 'Distressed area' has the meaning given that term in ORS
285A.010.
(b) 'Equipment investment' means moneys expended on machinery
or equipment that is:
(A) Newly manufactured or refurbished;
(B) Installed or used in a facility located in this state; and
(C) Certified by the Department of Revenue as producing
new-hire employees.
(c)(A) 'New-hire employee' means an individual hired by an
employer on or after the effective date of this 2007 Act to fill
a newly created position or to fill an existing position vacated
by a current employee who moves to a full-time position created
by the same employer on or after the effective date of this 2007
Act.
(B) 'New-hire employee' does not include an individual who:
(i) Was previously employed by the employer and is rehired,
unless the previous period of employment by the employer had
terminated more than 12 months before the date of rehire by the
employer;
(ii) Is a member of the taxpayer's family, as that term is
defined in section 267(c)(4) of the Internal Revenue Code; or
(iii) Holds, directly or indirectly, a five-percent or greater
ownership interest in the capital or profits of the employer
under section 267(c) and (e) of the Internal Revenue Code.
(d) 'Qualified investment' means an equipment investment or the
wages paid to a new-hire employee.
(e) 'Wages' has the meaning given that term in ORS 316.162.
(2) A credit against taxes that are otherwise due under ORS
chapter 316 or, if the taxpayer is a corporation, under ORS
chapter 317 or 318 is allowed to a taxpayer for qualified
investments made during the tax year.
(3) The credit allowed under this section shall be three
percent of the total certified amount of the qualified investment
made by the taxpayer during the tax year.
(4)(a) Notwithstanding subsection (3) of this section, if the
qualified investment was made in a distressed area, the credit
shall be five percent of the total certified amount of qualified
investment made by the taxpayer during the tax year. A taxpayer
seeking the credit described in this subsection, in addition to
the certification procedure described in subsection (8) of this
section, shall obtain certification from the Economic and
Community Development Department that the qualified investment
was made in a distressed area.
(b) The Economic and Community Development Department may adopt
rules to carryout the provisions of this subsection.
(5) The credit allowed under this section in any one tax year
may not exceed the tax liability of the taxpayer.
(6) Any tax credit otherwise allowable under this section that
is not used by the taxpayer in a particular tax year may be
carried forward and offset against the taxpayer's tax liability
for the next succeeding tax year. Any credit remaining unused in
the second succeeding tax year may be carried forward and used in
the third succeeding tax year. Any credit remaining unused in the
third succeeding tax year may be carried forward and used in the
fourth succeeding tax year. Any credit remaining unused in the
fourth succeeding tax year may be carried forward and used in the
fifth succeeding tax year, but may not be used in any tax year
thereafter.
(7)(a) A nonresident shall be allowed the credit computed under
this section in the same manner and subject to the same
limitations as the credit allowed a resident of this state.
However, the credit shall be prorated using the proportion
provided in ORS 316.117.
(b) If a change in the taxable year of a taxpayer occurs as
described in ORS 314.085, or if the department terminates the
taxpayer's taxable year under ORS 314.440, the credit allowed by
this section shall be prorated or computed in a manner consistent
with ORS 314.085.
(c) If a change in the status of a taxpayer from resident to
nonresident or from nonresident to resident occurs, the credit
allowed by this section shall be determined in a manner
consistent with ORS 316.117.
(8)(a) A taxpayer seeking a credit under this section shall
first obtain credit certification from the Department of Revenue
by applying for certification on a form prescribed by the
department. The application shall state the date of the equipment
investment or new hire and the amount of the qualified investment
made by the taxpayer during the tax year and any other
information required by the department.
(b) The Department of Revenue shall, after consulting with the
Economic and Community Development Department, adopt rules to
carry out the provisions of this section. The rules shall
include:
(A) Criteria for certifying qualified investments under this
section; and
(B) A mechanism for obtaining preliminary certification for the
credit described in this section.
(9) The taxpayer shall include with the taxpayer's tax return
the certificate received under subsection (8) of this section,
and, if applicable, the certificate received under subsection (4)
of this section. + }
SECTION 3. { + Section 2 of this 2007 Act applies to tax years
beginning on or after January 1, 2008. + }
----------